Bitcoin Woes in the First Week of December 2021

The first trading weekend of December was not kind to investors who take positions on Bitcoin and other tokens with considerable market capitalization. The total loss of the market in just three days was more than 12%, and Bitcoin performed even worst by shedding 14.6% against the U.S. dollar. BTC/USD was on the verge of dipping below the $40,000 mark, but a slight bounce left it at $41,000 by Monday morning.

While the figures above may point towards the beginning of a bear market for the rest of the holiday season, analysts are turning their attention to BTC futures and derivatives, which look promising for the next two weeks.

If the futures market begins to offer price stability by December 18, we would be looking at a BTC rebound towards $50K, with both the physical and derivative market available to investors. The introduction of futures is a milestone in the long-term adoption of digital currency, as it provides a direct trading mechanism on assets in the blockchain, which could prove more effective than the traditional financial system. We can't forget that there are now two Bitcoin exchange-traded funds actively trading on Wall Street, and they are both based on BTC futures.

In the traditional markets, it is possible to buy a “future”, which is basically an agreement to purchase the commodity or asset at a certain point in time. In the most basic sense, a futures contract can be described as an agreement to buy or sell the future asset or commodity at the specified price.

The market for futures is very active in traditional markets, but it had a low level of adoption in the crypto world until the two aforementioned ETFs started trading earlier this year. We need to give these two securities time to mature so that they can reduce volatility within Bitcoin trading; the rest of the market should then follow suit.